The President of the Central Bank of Peru, Julio Velarde, attacked the value of cryptocurrencies and noted the negative effects it has on the environment. In a recent interview with local media, Velarde said that the bank did not consider bitcoin as a payment method. Instead, Velarde referred to it as a “highly volatile financial asset” that people buy for this volatility risk.
The President of the Bank of Peru Explodes the Cryptocurrency
The President of the Central Bank of Peru, Julio Velarde, recently shared his opinion and thoughts about cryptocurrencies being held by the bank. The official said that these new elements in the economy had few flaws in comparison to their legal counterparts.
Velarde previously referred to the volatility of bitcoin and other cryptocurrencies, saying they are “highly volatile financial assets”. Velarde also pointed out that this is the attractive part of cryptocurrencies because of the risk that people and traders buy them.
According to Velarde, one of the reasons for this volatility is the lack of intrinsic value of these assets. He explained that because of this, “people can lose interest in holding it, and then the price can drop to anything.”
Velarde also pointed out that there were environmental concerns regarding the use of cryptocurrencies, stating that these are a problem due to their energy consumption. Velarde announced:
The problem with cryptocurrency now is climate change. It is least friendly to the environment. Continuing to mine bitcoin consumes the energy of a medium-sized country. These are impressive amounts.
Velarde’s Report on Peru’s Central Bank Digital Currency
Velarde also provided a report on the progress made by the institute in terms of designing its own digital currency. He said that the bank is working on a document to be presented in one and a half months after meeting with the Central Bank of India and the International Monetary Fund in the coming days.
The president of the central bank has been quick to compare these digital fiat counterparts to cryptocurrencies, clarifying that they will be backed by central banks. On the development of a Peruvian CBDC, the executive said:
I believe that we should follow the path in which we are with development by giving guidelines and setting certain norms in the regulations. We don’t know how the new geography of payments will end up in Peru.
Velarde announced last November that the bank was working on a Peruvian digital currency focused on payments. Also, a law was introduced in December to regulate cryptocurrency transactions and the activities of VASPs (Virtual Asset Service Providers) on Peruvian soil.
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